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Pacific had not shown that the lands were nonmineral at the time of the grant. It denied a request for a hearing on the ground that it would not develop facts decisive of the issue.

Southern Pacific has assigned various grounds of error in the decisions appealed from and requests a hearing in each case.

From this summary of the cases, it appears that the Bureau decisions rested the rejection of the applications on the ground that the lands applied for were mineral in character at the time of the grant to the railroad, i.e., the date on which the line of the railroad was definitely located. Southern Pacific, on the other hand, seems to assert that it is entitled to patents if the lands are determined to be nonmineral today. It contends, and the Bureau denies, that it is entitled to a hearing to prove the nonmineral character of the lands.

The 1862 and 1864 acts specifically excepted mineral lands from the operation of the grant to the railroad. The question early arose as of what date the mineral or nonmineral character of land in the primary limits of a railroad land grant was to be determined in order to ascertain whether the land passed under the grant. In Barden v. Northern Pacific R.R., 154 U.S. 288 (1894), it was held that the determination could be made at any time prior to issuance of a patent to the railroad and that if it were determined prior to the issuance of a patent that the land was mineral in character the grant would fail as to that land. This rule has become firmly established. Wyoming v. United States, 255 U.S. 489, 507–508 (1921); Anderson v. McKay, 211 F. 2d 798, 807 (D.C. Cir. 1954), cert. denied, 348 U.S. 836 (1954), rehearing denied, 348 U.S. 890 (1954).

In Barden v. Northern Pacific R.R., supra, the Court noted that the Department of the Interior had stated in Central Pacific Railroad Company v. Valentine, 11 L.D. 238, 246 (1890), that it had been the practice of the Department for many years to refuse to issue patents to railroad companies for land found to be mineral in character at any time before the date of the patent and that this practice had become, in effect, a rule of property.

The ruling cited applies to cases where, apparently, at the time the line of the railroad was definitely located the land in the grant was not known to be mineral land but it was found later to be mineral in character prior to issuance of a patent. No cases have been found where the reverse situation existed, that is, where land in the grant was known to be mineral at the time the railroad was definitely located but was subsequently determined to have lost its mineral character. Such cases apparently have not arisen because it probably has been assumed all along that any land known to be mineral in character when the railroad was definitely located was forever excluded from the grant, regardless of whether the land should later become nonmineral. This is plainly indicated by the Court's statement in the Barden case, supra, that

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It seems to us as plain as language can make it that the intention of Congress was to exclude from the grant actual mineral lands, whether known or unknown, and not merely such as were at the time known to be mineral. (P. 316.) In other words, Congress said that the railroad should not have any land which was known to be mineral in character at the time the line of the railroad was definitely located and that it should not have any land not then known to be mineral but later ascertained to be mineral prior to issuance of a patent.

In the cases before us, then, if Southern Pacific had not filed a release under the Transportation Act and had not sold the lands in question but applied for patents on its own behalf, the applications would have to be rejected if (1) the lands were known to be mineral lands at the time when the railroad was definitely located, regardless of their character now, or (2) the lands were determined to be mineral in character now although they were not known to be such at the time the railroad was definitely located.

The question presented by the appeals is whether these principles are affected because the lands have in fact been sold to persons asserted to be innocent purchasers for value. The answer is not clear but is indicated by rulings of the Department in analogus situations.

By the act of March 3, 1887, 24 Stat. 556, 43 U.S.C. SS 894–899 (1958), the Secretary of the Interior was directed to adjust each of the railroad land grants. Section 5 of the act, 24 Stat. 557, 43 U.S.C. § 898 (1958), provided

That where any said (railroad] company shall have sold to citizens of the United States * * * as a part of its grant, lands not conveyed to or for the use of such company * * * and where the lands so sold are for any reason excepted from the operation of the grant to said company, it shall be lawful for the bona fide purchaser thereof from said company to make payment to the United States for said lands * * * and thereupon patents shall issue therefor to the said bona fide purchaser, his heirs or assigns * * *.

In Hutton et al. v. Forbes, 31 L.D. 325 (1902), the Department held that one was not a purchaser in good faith under section 5 of the 1887 act where the lands applied for were believed by him at the time of purchase to be mineral lands and there was physical evidence of the mineral character of the lands. Specifically recognizing that mineral lands were excluded from the grant to the railroad, the Department said that if the lands were not known at the time of purchase to be mineral lands, no subsequent discovery or development of minerals on them could affect the question of the good faith of the purchase, and no evidence of such subsequent changes in condition could be considered.

In Clogston v. Palmer, 32 L.D. 77 (1903), the Department held again that the bona fides of a purchase within the contemplation of the 1887 act was to be determined as of the date of purchase. In that case, the original sale by the railroad was in 1889 and an application for purchase was made in 1898 by one who had succeeded to the interests of the original purchaser in 1895. A protest was filed against the purchase on the ground that in 1901 the land was known to be mineral in character. In dismissing the protest the Department noted that no charge had been made that the land was known to be mineral in character at the time of the original purchase (1889) or at the time of the purchase by the applicant under the 1887 act. The Department said:

*** The known character of the land at the date of the purchase from the company is therefore the determining factor in any controversy involving the character of the land applied for under the provisions of said section [5 of the 1887 act). To except land from purchase under its provisions for the reason that they contain minerals, it must appear that the lands were of known mineral character at the date of the sale by the land-grant company, and therefore were such that the purchaser should have known at the time of his purchase that they were excepted from the grant to the railroad company, and that he could obtain no title thereto from the company. (P. 82.)

Many years later, Hutton v. Forbes and Clogston v. Palmer were distinguished in Buckholts v. Anderson, 56 I.D. 44 (1936). In that case the railroad sold land in 1879 to Anderson's predecessor in interest. Anderson was conveyed the land in 1897. On July 20, 1936, Anderson applied to purchase the land under section 5 of the 1887 act. Meanwhile the act of July 17, 1914, 38 Stat. 509, as amended, 30 U.S.C. SS 121-123 (1958), had been enacted. This act provides that lands withdrawn or classified or reported as valuable for certain minerals, including oil and gas, are open to disposal under the nonmineral land laws provided that the minerals in question are reserved to the United States. Buckholts had applied for an oil and gas lease on the land a few months before Anderson filed his application. The Commissioner of the General Land Office rejected Buckholts' application on the ground that since there was no evidence that the original purchaser from the railroad knew of the mineral character of the land at the time of purchase, Anderson as his successor would have a right to any oil and gas in the land. The Commissioner cited Hutton v. Forbes and Clogston v. Palmer.

The Department reversed, holding that since Anderson had no rested right or equitable title in the land but a mere privilege of purchasing, the privilege must be regarded as modified by the 1914 act so that he could purchase the land only with a waiver of right as to the oil and gas. The Department said:

*** There may be justification for the Clogston v. Palmer decision, because then it was a question of all or nothing. Now the laws are modified. 56 I.D. at

48.

The Department's decision was sustained in Anderson v. McKay, supra. In so doing the court considered the status of the grant to

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the railroad as of several dates. One was the nature of the grant at the time of the original sale of the land to Anderson's predecessor, Warren, in 1879. Citing the Barden case, supra, the court stated that

, since the railroad could convey to Warren only what it had and since it could not convey mineral land, it did not convey to him in 1879 any mineral land. "Should the land eventually prove to be mineral land, it was not within the grant to the railroad * * * [citing Barden) and hence was not conveyed by it to Warren." 211 F. 2d at 802. The court then went on to say that because of the plight of purchasers in those circumstances Congress passed the 1887 act.

*** It authorized the issuance of patents to such purchasers. The patent, if obtained, would convey to the patentee the title which he had not received by his deed from the railroad, and, moreover, the patent would erase flaws or omissions which inhered in the grant to and the conveyances from the railroad. (P. 802).

The court sustained the Department's view that the 1887 act did not give the purchaser an indefeasible right to an unrestricted fee simple title but an inchoate right to purchase which could be and was modified by the 1914 act, supra, so far as mineral lands covered by the 1914 act are concerned. Anderson argued that the Department had not administratively adhered to this view but, on the contrary, had continued to follow Clogston v. Palmer and to issue unrestricted patents to applicants under the 1887 act. The court answered that none of the cases cited by Anderson had concerned a 1914 act mineral.

Careful reading of the Department’s and the court's decisions in the Anderson case leads to the conclusion that Clogston v. Palmer is still in effect as to grant lands determined to be mineral in character for minerals not covered by the 1914 act.

The next question is whether the same ruling is applicable to applications for patent under section 321(b) of the Transportation Act of 1940. The legislative history of the act sheds no light on the intent of Congress in enacting the particular provision under consideration but the language employed, “issuance of patents confirming the title to such lands as * * * have been heretofore sold by any such carrier to an innocent purchaser for value," strongly indicates an intent to permit the curing of what would otherwise be an imperfect title. This is the connotation suggested by the phrase "innocent purchaser for value." In the absence of any persuasive reason for construing section 321(b) of the Transportation Act differently from section 5 of the 1887 act, we conclude that the Clogston v. Palmer ruling is equally applicable to cases arising under section 321 (b). This leads to the conclusion that section 321 (b), like section 5, modifies the general rule in the Barden case that a determination of mineral character can be made at any time prior to the issuance of patent.

It is to be noted that the modification of the Barden rule obtains

only in cases where the grant lands were sold to an innocent purchaser for value. The Supreme Court considered the question of what constitutes an innocent purchaser in connection with a suit to cancel a patent issued to the Western Pacific Railroad Company which was predicated on the ground that the land was known to be mineral land when the patent was issued so that it was excepted from the grant and the patent was thus issued without authority of law. A purchaser two degrees removed from the company resisted the cancellation of the patent on the ground that he was an innocent purchaser. The Court denied that he was an innocent purchaser because it found that he knew that the land was mineral years before he, as agent for the railroad, applied for patent. McLaughlin v. United States, 107 U.S. 526, 528 (1882); Western Pacific R.R. v. United States, 108 U.S. 510, 513 (1882).

In United States v. Central Pac. R. Co., 84 Fed. 218, 221 (Cir. Ct., N.D. Cal. 1898), the court also considered the rights of purchasers from a railroad grantee in a suit to cancel the patent to the grantee. The court said:

*** The status of a bona fide purchaser is made up of three essential elements: (1) a valuable consideration; (2) absence of notice; and (3) the presence of good faith. * * * I am of the opinion that these defendants had notice, actual or constructive, of the character of the land in section 27 which they contracted to buy from the grantee company and its trustees. They were certainly chargeable with notice of the character of the land, for it had been occupied and known since 1850 as mineral land, and as being unfit for agricultural purposes. It was covered with evidences of mining claims and mining explorations. Notices of location affecting different portions of the section had been filed of record in the mining recorder's office of the Forks of the Butte mining district before the defendants entered into their contract to buy the land from the grantee company and its trustees, which was some time in 1885 and 1886. With respect to the defendants Jones and Gale, it appears further that the element of good faith is entirely wanting; for Jones had, before acquiring any interest in the land he contracted to purchase, owned and worked a claim in the same part of this section, while Gale had, with others, filed a mining location upon the same land which he contracted to buy.

* * * I am of the opinion, from the evidence, * * * that the defendants, other than the grantee company and its trustees, are not bona fide purchasers.

To summarize at this point, to defeat the applications of Southern Pacific for the reason that the lands applied for are mineral, it must appear that the lands were of known mineral character at the date of the original sale by the railroad and that the purchasers should have known at the time of their purchase that the lands were excepted from the grant to the railroad and that they could obtain no title from the railroad. This rules out as irrelevant any consideration of the mineral character of the lands today or at the time when the line of the railroad was definitely located. The critical date is the date of sale by the railroad.

As to the procedure for making the determination, it has long been

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